“In Search Of Excellence” By Thomas J. Peters And Robert H. Waterman: Analysis Of The Attributes Of An Excellent Company

An attempt is made by authors to understand the relationship between the performance and the eight attributes. Old theories were considered to be less ambiquious and more straight forward, but they were not of real life implication. It’s found that managing the paradox is one important attribute of excellent companies.

There are four main eras of theoretical development and management practices identified by Richard Scott. The first era runs from 1900 to 1930 and it is a ‘closed system – rational actor’ era propounded by Weber and Taylor. They were of the concept that a finite body of rules would help manage a large number of people. From 1930 to 1960, it was ‘Closed system social actor’ era which aimed at testing the effectiveness of work condition on productivity. Mayo, McGregor, Chester Bernard and Selznick were the propounders. Third stage ‘Open system rational actor’ from 1960 to 1970 aimed at viewing a company as a part of competitive marketplace which is shaped by external forces. Alfred Chandler is the main contributor. Fourth stage was of ‘Open system social actor’ from 1970 which is tend to continue even today. This point out that everything is in a flux- end, means, and the storms of external change. Propounders were Cornell’s Karl Weick and Stanford’s James March. This approach emphasizes informality, individual entrepreneurship and evolution. The book also deals with the importance of values in the excellence of an organization. It is the power of the value that encourage practical innovation to carry out its spirit to full.

Management evolution is other aspect that makes the company more adaptive. Evolution is continuously there in the market place; and the adaptation is crucial there and the excellent companies are those who pull it off. They also understand that diseconomies of scale seem to set in vengeance. The core management practices in excellent companies is that they set conventional management wisdom on its ear. These companies also abound in distinctly individual techniques that counter the normal tendency towards conformity and inertia. They are able to make some quick decision simply because their organization is fluid and they treat MBWA (Management By Wandering Around) as a major tenet. Such firms also engage in shifting their resources. The excellent companies have found numerous ways to break things up in order to make their organization fluid and to put the right resources against the problem. Attitudes, culture, climate must treat adhoc behavior as more normal than beaurocratic behavior. The important and visible feature of the action bias in the excellent companies is their willingness to try out or to experiment. They best treat activities more or less like poker, they are relatively speedy.

Experimentation is a kind of cheap learning for most of the excellent companies but it is useful than market research. It is relatively invisible but done usually with user participation. Excellent companies management are tolerant to leaky systems, support bootlegging, roll with unexpected changes and encourage champions. Experimentation is in fact at the heart of so called excellent companies. The one page memo, honest numbers, focused objectives are some of the system traits that make the excellent companies distinct; but the context too is equally important. They strive continually on trails and system until they get a tradeoff between simplicity and complexity right. Action orientation is an important trait for excellent companies. Another feature is closeness to customer. It is said that other company talks about this customer relation and the excellent companies does it. ‘Each of us is a company’ comes to take on real meaning in case of an excellent company. Firms are quality obsessed; for excellent companies believe ‘doing it right is the only way’. These firms also use ‘Nichemanship’ for it is accompanied by a problem solving mentality. The authors claim that most of best run companies are less concerned with cost. They are also better listeners for most of their innovation comes from market. These firms encourage entrepreneurial spirit among people and they are less concerned about cost and prefer value more internal competition permeates excellent company. They revolve around a champion.

There are different attributes for the communication system like being informal, extraordinary that makes these firms unique. Special attribute of such firms is their tolerance towards failure. The last attribute of excellent companies is productivity through people. They treat people as adults, partners, treat them with dignity, with respect; not capital spending and automation but as primary source of productivity gains. There is no greater feature of an excellent firm other than respect for individual. The attention the firms pay to values, the way in which their leaders have created exciting environments through personal attention, persistence and direct intervention point to that feature of excellent firm-Hands –on Value driven. Extend to which their leaders unleash excitement is a striking feature of excellent company. As stated by authors ‘Clarifying the value system and breathing life into it are the greatest contribution a leader can make’.

Another attribute of excellent firm is stick to knitting. Excellent companies act as if they believe philosophically in diversification. Even though some big companies thrived on growth with acquisition most follow “small is beautiful’ strategy. Simple form and lean staff is the other characteristic. Excellent companies use a fairly stable, unchanging form which everybody can understand. They follow simplicity and in fact they find more flexibility in their operation. They also recruit comparatively less people for they believe it’s not the numbers but the kind of people that matters. The firms possess also simultaneous loose- tight properties, the last attribute. It brings a coexistence between firms central direction and individual autonomy. This enable firm to be rigidly controlled and allow autonomy, entrepreneurship, and innovation.

Thus through this book titled ‘In Search Of Excellence’ Thomas J. Peters and Robert H. Waterman explain the attributes that make up an excellent company. American companies like IBM, McDonalds HP, 3M, Johnson and Johnson, Delta Airlines are the sources of study of excellence. By citing examples from these companies life and by the experienced shared by those working in the firm, the authors identify the eight attribute constituting it and thereby end their search for excellence.